Nasdaq 100 rallies strongly as USD/JPY, Brent crude rise too 

Macro update

Tech shares drive global markets higher: Strong demand for Meta’s Muse AI assistant reignited enthusiasm for technology stocks, pushing the Nasdaq to a record close, lifting Asian equities to a two-week high and sending Advanced Micro Devices above a $1trn valuation.

Bitcoin surges to fresh eight-month high: The cryptocurrency climbed above $86,000, its highest level since late January, gaining around 6% on the day and more than 8% over the week. The rally has prompted some market participants to suggest the “crypto winter” that followed last October’s record high may be ending, while investors have also rotated away from AI stocks.

Dollar stays strong as yen comes under pressure: Expectations of further Federal Reserve tightening kept the greenback close to a seven-week high, while a wide interest-rate differential and dovish dissent at the Bank of Japan left the yen near a three-week low of ¥157.47 per dollar.

Markets raise expectations for further rate hikes: Major central banks adopted a hawkish stance after the Fed raised rates and warned that the battle against inflation was not over, with markets pricing in roughly a 56% chance of another US rate increase in October.

Oil rebounds after five-day losing streak: Brent rose 1.1% to around $101 a barrel as traders awaited the possibility of US-Iran talks at the UN General Assembly, although the move appeared largely driven by short-covering after shipments through the Strait of Hormuz reached a six-month high.

Gold remains subdued amid higher-for-longer rates: Gold traded little changed near $4,342 an ounce as expectations for elevated interest rates weighed on demand for the non-yielding asset, with St. Louis Fed President Alberto Musalem indicating that further tightening could be required.

Nasdaq 100 rally continues

The Nasdaq 100 has resumed it ascent and is fast approaching its June peaks at 30,587-to-30,762, a rise above which is likely to engage the 31,000 region.

Previous resistance such as the late June high at 30,329 and the mid-August highs at 30,195 - because of inverse polarity - is expected to act as support.

Short-term outlook: bullish while above the 18 September 29,372 low

Medium-term outlook: bullish while above the 16 September low at 28,753

Nasdaq 100 daily candelstick chart

USD/JPY nears resistance

USD/JPY's recovery from its ¥152.88 early September low is gradually taking the cross towards its July-to-September resistance line, 200-day simple moving average (SMA) and 20 August low at ¥158.02-to-¥158.40. Were this resistance zone to be exceeded, the 18 August high at ¥159.78 and the early September peak at ¥160.39 may be revisited.

Minor support may be found around the 7 August low at ¥156.68 and the 16 September high at ¥156.42.

Short-term outlook: bullish while above the 17 September low at ¥155.34

Medium-term outlook: neutral with a bullish undertone while above the 8 September low at ¥152.88

USD/JPY daily candlestick chart

Brent crude in recovery mode

Brent Crude's recent descent seems to have paused at Monday's $99.75 per barrel low with it revisiting minor resistance at the 17 September $102.64 low.

A rise above Monday's $105.76 high would likely lead to further upside towards the $110 region being seen whereas a fall through this week's $99.75 low may lead to the early June high at $98.15 being touched, ahead of a key support zone at $96.19-to-$94.36. It consists of the July-to-August highs and early September low.

Short-term outlook: bearish while below the 21 September high at $105.76

Medium-term outlook: neutral with a bullish bias while above the 4 September $95.16 low

Brent crude daily candlestick chart